The government plans to offer the Egyptian Electricity Transmission Co. (EETC) to strategic investors and the private sector in March as part of the state’s public offerings program being implemented in coordination with the IMF, a senior Finance Ministry source told Al Manassa.
EETC has sole responsibility for purchasing electricity from state and private generation companies and reselling it to state-owned distribution companies. It also implements and operates all electricity interconnection projects with other countries.
In April last year, EETC was split from the Egyptian Electricity Holding Co. to operate as an independent operator of the electricity transmission system, based on a decision by the ordinary general assemblies of the two companies in the same month.
The source said the government will offer the company directly to investors. If it does not receive suitable offers, it will float a stake of between 25% and 30% of its shares on the Egyptian Exchange.
The aim of the offering is to liberalize the electricity market and attract new Arab and foreign investment to support energy projects, the source said, noting that prices will not rise for consumers as they will remain subject to government assessments, with a focus on improving services.
The source said the government has hired financial and legal advisers to manage the offering process, and that the company’s assets will undergo financial and technical valuation “to ensure the best returns.”
A government source told Al Manassa this month that the government had received offers from 70 consortia of local and Gulf investors to manage and operate airports, one of the most prominent sectors the state is betting on to advance the privatization program. But, according to the source, the government rejected most of these offers due to their low financial value.
Egypt is awaiting the IMF Executive Board’s approval of the fifth and sixth reviews of its loan agreement with the fund. The loan’s reform program emphasizes expanding the sale of public assets, and the institution has previously criticized the slow pace of privatization.
In 2015, Egypt issued a new law to regulate the electricity sector, allowing a larger private-sector role in the energy sector. The law stipulates that the EETC is subject to the Joint Stock Companies Law and the Capital Market Law.
The source said the government is moving ahead with the public offerings program, particularly in the energy and electricity sector. Several power plants are scheduled to be offered during the current year, including the Gabal El Zeit wind farm and Beni Suef power plant.
